LONGMONT, Colo.--(BUSINESS WIRE)--Dec. 11, 1995--REXON Inc. Monday announced that the company has entered into a definitive purchase agreement with Legacy Storage Systems International Inc. (TSE/ASE:LEG) which has been approved by the unsecured creditors' committee for Rexon/Tecmar Inc. (a subsidiary of Rexon).
The purchase agreement contemplates a plan of reorganization under which Legacy acquires the business of Rexon and its subsidiaries, including, to the extent possible, the purchase of all shares of a reorganized Rexon. The transaction is subject to approval by the U.S. Bankruptcy Court for the District of Colorado.
In the event that Rexon's plan of reorganization is not confirmed by the Bankruptcy Court by March 1, 1996, the purchase agreement contemplates that Rexon would seek approval of the Bankruptcy Court to sell substantially all of the assets of Rexon and its subsidiaries to Legacy pursuant to section 363 of Title II of the U.S. Bankruptcy Code.
In addition to approval of the Bankruptcy Court, closing of the transaction is subject to a number of conditions including completion of a due diligence analysis satisfactory to Legacy and the approval of all applicable stock exchanges. It is anticipated that the transaction will be completed by the companies on or about March 1, 1996.
Rexon has entered into a commitment (no-shop) whereby it will not solicit alternate purchasers or investors for the business of Rexon. In addition, Rexon has agreed to a "top-up" requirement under which it has agreed not to accept any offers for the purchase of Rexon unless the purchase price exceeds that payable by Legacy by a minimum of $2 million (USDLR).
In the event that a purchaser other than Legacy acquires the business of Rexon, Legacy would be entitled to a break-up fee of $1 million (USDLR). The no-shop, top-up and break-up fee provisions would become effective when approved by the Bankruptcy Court. If these provisions are approved by the Bankruptcy Court, Legacy will issue an additional 2.5 million common shares.
If the conditions are met, the price of approximately $27 million is to be satisfied through the assumption of debt, the payment of cash and the issuance of shares of Legacy having a trading value, at closing, of $5 million (USDLR).
Legacy is a personal computer peripheral systems corporation operating in the data storage subsystems sector. Legacy manufactures, assembles and distributes data storage subsystems for the personal computer local area network environment. It provides technical support services to users of its products, conducts research and development to upgrade existing products and develops new products for all major operating systems.
Legacy markets worldwide to Fortune 500 companies.
REXON is a publicly owned company dedicated to data storage and systems for the computer industry. It offers Wangtek 1/4-inch cartridge (QIC) and Digital Audio Tape (DAT) drive product. Tecmar brand solutions include QICVault, DATaVault, ProLine and ProLine CX. Rexon manufactures in Singapore.
CONTACT: J. Embry Co.
J. Embry, 310/355-0761
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